Inc. Technology

GourmetStation.com, an online retailer that delivers gourmet dinners and other upscale gifts, wanted to help customers find what they were looking for 24/7 but with only a handful of year-round staff that was difficult. CEO Donna Lynes-Miller tells IncTechnology.com that virtual chat technology provided customers instant answers and increased sales.

Elizabeth Wasserman: Why did you look to chat technology to increase sales?

Donna Lynes-Miller: I didn't look to technology. I wasn't tech-savvy enough to look to technology. I was actually contacted by the sales team at UpSellit about their SMARTsales Agent tool. But I was certainly aware of shopping cart abandonment. When we launched in 2000, our biggest obstacle was making customers comfortable with buying pricey food on the Internet and not knowing you – not being able to walk into a store and touch and feel the food. That was all about conversions and sales. We never had problems with the core part of our business, the operational side. The real problem was that our average transaction is over $150, but that's a lot to ask a customer to spend at a small brand like GourmetStation. However, the longer we are around, the more we have repeat customers and referrals.

Wasserman: What did you try to do?

Lynes-Miller: We started out broadening our product line. In the beginning, we had 16 entrees and four different menus. A lot of times, our offering was really too narrow. So we introduced gift certificates and we added three-course and four-course dinners. And then the vendor contacted us.

Wasserman: So how does the virtual chat agent work?

Lynes-Miller: If you're familiar with websites that have live human chat that message communicate with customers -- that was a luxury for a small company like us. We simply don't have the resources for that. What UpSellit offered was chat but pre-programmed, customizable chat. The first version we used only engaged the customer if they had added an item to the cart but abandoned it. The chat person, who we named Susan, would actually interrupt and say, "Hey, don't go. Wait a minute. We really want to have you as the customer. To give you an incentive to make this purchase, we'll offer you 50 percent off of shipping, which amounts to a $10 discount." That's what we did to try to save the sale.

Wasserman: What were the results?

Lynes-Miller: We implemented the first version in August 2006. We only had six months to go for the rest of the year. But the transactions saved by the automatic chat were 10.3 percent of transactions for the whole year. Last year, they came out with another version of the same basic technology. Instead of engaging the customer only if they added something to the cart, the technology would engage the customer if they went off the site and say, "Hey, don't go." Since the beginning, we have stuck with the 50 percent shipping discount. Online customers hate paying for shipping. I'm that way. I'll do anything I can to avoid paying for shipping. In 2007, with the upgraded version, we saw that 11.7 percent -- nearly 12 percent – of our transactions came as a result of the programmed chat. It increased sales. If any online merchant tells you that's not important, they're fibbing. We're all out there every day trying to increase conversions and increase sales.

Wasserman: Did you see any other results?

Lynes-Miller: There were some side benefits, too. The presence of automated chat gives a small brand like us the perception of being bigger than we are. Most of the customers are interested in the discount. But I also think they appreciate the presence of the chat. It's good for our brand. The second thing is that a byproduct of this is being able to read the chat logs. They have a very sophisticated back end. Every time you engage a customer in a dialog back and forth, you can see a lot of interesting questions being asked. In 2007, we were asked why we didn't sell whole deserts. We sold cheese cakes as a multi-course meal offering but we didn't offer just a whole dessert. That gave us insight into what our customers wanted. And we added a dessert category.